About General Liability Insurance
All businesses, regardless of industry, face risks that should be covered by insurance. The most common and comprehensive type of policy business owners invest in is general liability insurance (or CGL).
Some of the risks CGL insurance covers are:
- Bodily injury
- Property damage
- Medical payments
- Legal defense and judgment
- Personal and advertising injury
While businesses aren’t legally required to carry general liability insurance, operating without it is extremely risky. If your business is sued, you could end up facing fees totaling hundreds of thousands of dollars (or more). Having a sufficient CGL policy in place to help compensate for these damages is the only way to prevent this type of event from devastating your business.
COMMON SITUATIONS THAT GENERAL LIABILITY INSURANCE WOULD COVER FOR A FENCE COMPANY
Example 1: An electronic gate malfunctions and closes too fast, injuring the customer’s leg. General liability insurance may cover any medical expenses and legal fees associated with the incident, whether the gate was improperly installed or simply malfunctioned.
Example 2: The homeowner decides to step in and help build the fence. Upon picking up the tool and attempting to use it, they severely injure their back. The accidental injury to the non-employee may be covered by your general liability insurance policy. If the claim is approved, your insurance would help pay for any expenses related to treating the injury and/or any lawsuits that arose from the incident.
Example 3: The building of the fence causes damage to the neighbor’s property. If while constructing the fence a piece of equipment or material flies over the fence and damages the neighbor’s property, your general liability insurance may cover the cost of repairing the damage. If the neighbor decides to sue, it may also cover any legal costs and judgments or settlements related to the case.
Of course, this is not an exhaustive list of perils a general liability insurance policy will cover, and some conditions may result in a particular peril not being covered. It’s always best to talk to your agent in-depth about the specifics of your policy to avoid blind spots in coverage.
COST OF GENERAL LIABILITY INSURANCE
The average fence company in America spends between $500-$1,500 per year for $1 million in general liability coverage.
Check out the chart below for a snapshot of average CGL expenditure across a variety of industries:
Several factors will determine the price of your policy. These include your:
- Number of employees
- Per-occurrence limit
- General aggregate limit
You may be able to acquire general liability insurance at a discounted rate by purchasing it as part of a business owner’s policy (BOP) rather than as a standalone policy. A BOP is a more comprehensive solution that includes multiple forms of coverage, such as business interruption and property insurance.
OTHER TYPES OF COVERAGE FENCE COMPANIES NEED
While general liability is the most important type of insurance to have, there are several other forms of coverage you should be aware of. Below are some other types of insurance all fence companies should obtain:
Commercial Auto Insurance
Commercial auto insurance helps protect you against financial loss if your work vehicle is damaged in an accident or if you hit another vehicle or object while driving your work vehicle for business purposes. If you are found to be the at-fault driver, this type of insurance may pay for the repairs and/or replacement of your work vehicle, any personal injuries to you, the other driver, or passengers, and any damage to the other person’s vehicle or property.
Commercial Umbrella Insurance
Commercial insurance policies don’t always cover the entire cost of an incident or accident. When this happens, you need commercial umbrella insurance, which covers the remainder of the costs associated with the accident or incident.
Workers’ Compensation Insurance
Occasionally, your employees may experience injuries on the job, like a back injury, a bad cut, or a slip and fall. Workers’ compensation helps pay for the medical costs associated with treating the injury.
TYPES OF COVERAGE SOME FENCE COMPANIES MAY NEED
In addition to the policies outlined above, there are a few other types of coverage your fence company may require depending on certain aspects of your operations. Some of these might not apply to you, so be sure to ask your agent which policies are right for your business.
Business Owner’s Policy
Business owner’s policies, if they are available in your area, combine general liability insurance, property owner’s insurance, and potentially other types into one policy
Commercial Property Insurance
Commercial property insurance is a good idea for any fencing installer that stores their equipment and materials at a brick and mortar commercial location. These types of policies cover damage to the building and stored equipment that is the result of weather damage, fire, and vandalism.
Employee Dishonesty Coverage
Employee dishonesty coverage covers employee theft of materials, equipment, money, and other items from your place of business or the worksite.
ADDITIONAL STEPS TO PROTECT YOUR BUSINESS
Although it’s easy (and essential) to invest in business insurance, it should not be your frontline defense. Yes, insurance will compensate for your business’ financial losses after an incident occurs, but it’s much better to avoid losses altogether.
With this in mind, here are three things you can do to better protect your business:
- Use legally robust contracts and other business documents. (We offer free templates for some of the most common legal forms.)
- Set up a limited liability company (LLC) to protect your personal assets. (Refer to our guide for step-by-step instructions on how to form an LLC in your state.)
- Streamline your business’ internal processes. This will remove unnecessary variables from common tasks and create a safe, consistent environment for conducting business.
FREQUENTLY ASKED QUESTIONS
What is included in a business owner’s policy?
A typical business owner’s policy includes general liability, business interruption, and property insurance. However, BOPs are often customizable, so your agent may recommend adding professional liability, commercial auto, or other types of coverage to your package depending on your company’s needs.
What is the difference between business insurance and general liability insurance?
“Business insurance” is a generic term used to describe many different types of coverage a business may need. General liability insurance, on the other hand, is a specific type of coverage that business owners need to protect their assets.
Do I need insurance before I start a business?
You should invest in coverage for your business before your first interaction with a customer. Although the cost of insurance may seem high for a brand new business, it’s best to be proactive when it comes to protecting your assets. After all, you can’t buy insurance to cover a loss that has already occurred.
Will insurance protect my business from everything?
Not necessarily. Certain exceptions may be written directly into your policy, and some perils may be entirely uninsurable. Be sure to discuss the scope of your policy in-depth with your agent to avoid being blindsided by holes in your coverage.